Modern marketers have exposure to a full range of promotional platforms, and new ones are cropping up every other day. This makes it possible for both small and large companies to reach their target customers, even with small budgets. Moreover, marketing teams can easily identify and assess different channels and tactics thanks to modern marketing-monitoring tools, like SERP Tracker. These tools help marketing managers collect valuable data about their marketing campaigns for better decision making.
However, even with data and online campaign analytics, many people still make costly KPI mistakes.
Why do you need marketing KPIs?
On average, companies invest approximately 10% of their annual budget on promotional campaigns. The hardest role of most CMOs is convincing management that this kind of investment pays off. This is where KPIs come in. Key Performance Indicators (KPIs) have become an integral part of any effective marketing strategy. Simply put, KPIs measure the Return on Investment (ROI) for your marketing strategy. They involve measuring and analyzing various metrics to build objective evidence that shows how marketing activities and actions contribute to achieving business goals. Below are some of the common mistakes you should avoid when identifying and implementing accurate KPIs for your business.
Ignoring/Lacking Marketing KPIs
Failing to set KPIs for your marketing strategy is the first mistake you can make. This means you have no metrics to measure whether your marketing model is bearing fruit or not. Your business could be performing well, but you can’t tell which of the marketing techniques were profitable. Similarly, it makes it hard to identify which efforts are unfruitful so you can avoid them in the future. You need to develop and implement the right KPIs to help you relate performance to specific activities or actions.
Trying to Focus on Too Many and Generic KPIs
Setting too many marketing KPIs is not only illogical, but also creates confusion. In fact, when you have more than 10 KPIs, they are no longer “key” and you end up measuring the wrong things. With too many metrics to measure, your marketing team is likely to focus on KPIs that are meaningful to them, leaving some important elements unattended.
Another common flaw is adopting borrowed KPIs or setting KPIs that are not specific to your business. Generic KPIs can be misleading as they’re not tied to your specific business goals. You could be focusing on metrics that are irrelevant to your business. The best approach is to keenly analyse your data dashboard, pick measurable and tangible metrics to develop KPIs that align with your business objectives.
Over-Reliance on Vanity Metrics
There are too many marketing metrics to choose from, increasing the chances of choosing irrelevant and unmeasurable performance indicators. Vanity metrics are those that measure the activities rather than the results. They focus on quantity over quality. For instance, measuring the number of likes or clicks on a social media post can be a very helpful part of your KPIs, but without context, these numbers mean nothing to management.
Failure to Translate Soft Metrics into Hard Metrics
Your KPIs should communicate the impact of your marketing efforts in a way that management can easily understand. It’s easy for marketers to understand and measure soft metrics like open rates, impressions, clicks and licks from a marketing channel. But management understands hard metrics like revenue, sales forecast and profit/loss. You need to measure and explain how the data affects the hard metrics. How does the organic search rankings align with business goals?
Additionally, it helps translate marketing jargon in terms decision makers are familiar with.
If you try to be perfect with KPIs, you’ll end up frustrated. The aim is not to find the perfect marketing KPIs, but measuring reliable and significantly relevant metrics to generate actionable marketing insights. However, it’s important to ensure that your data is as accurate as possible to help you make the right decisions to achieve better results.
With modern technology, marketers have a lot of data to analyze, making it hard to track the right marketing elements. Setting marketing KPIs isn’t enough. Business owners and CEOs should analyze marketing data to develop and implement unique KPIs that align with overall business goals. To achieve this, it’s important to consider the common mistakes listed above and avoid them as best you can.